Project Finance Project financing is a non-traditional financing technique that is now also used by many high-profile corporate projects. It is increasingly emerging as the preferred alternative to financing fixed assets and other large-scale projects. As a study, Project Finance includes understanding the rationale of project financing, how to prepare the financial plan, assess the risks, design the financing mix and raise the funds. According to the International Project Finance Association, “Project Finance” is defined as “The financing of long-term infrastructure, industrial projects and public services, on a non-recourse project basis (Project Finance secured by some sort of collateral, usually property, plant, equipment, etc. is known as non-recourse financing) or limited recourse financing structure (where the project debt and equity used to finance the project are repaid from the cash flow generated by the project)” Project finance is financing for a particular project, such as the hospital in our case, which is repaid from that project's cash flow. It is different from traditional forms of financing because the financier primarily looks at the project's assets and revenues to secure and service the loan Usually, no recourse is provided from the borrower's non-project assets, the credit risk associated with the borrower is not as important as in a normal lending transaction; what is most important is the identification, analysis, allocation and management of every risk associated with the project. Figure 1: Features of Project FinanceTerm LoanA term loan is a loan with a maturity date but no amortization. The borrower pays interest monthly, quarterly or annually, a... means of credit card... and bank guarantees are part of the no-fund financing. They remain dormant on the balance sheet until the transactions fall within the stipulated limits. Letter of Credit – A buyer issues a letter of credit in favor of the seller from his issuing bank. After the seller has sent the goods, he goes with the required documents to the Confirming Bank, which gives the guarantee of payment. The seller can then choose any bank for negotiating his letter of credit. Bank Guarantee – The bank issues a guarantee that whether or not a specific event occurs, the bank will compensate for any loss incurred. The guarantee is issued upon receipt of a request from the applicant for a purpose/operation in favor of a Beneficiary. The issuing bank will pay the guarantee amount to the "beneficiary" of the guarantee upon receipt of the request from the beneficiary.